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Visa (V) Stock Sinks As Market Gains: What You Should Know

Zacks Equity Research

Visa (V) closed at $189.19 in the latest trading session, marking a -0.22% move from the prior day. This move lagged the S&P 500's daily gain of 0.35%. Elsewhere, the Dow gained 0.24%, while the tech-heavy Nasdaq added 0.56%.

Prior to today's trading, shares of the global payments processor had gained 4.24% over the past month. This has outpaced the Business Services sector's gain of 3.85% and lagged the S&P 500's gain of 4.69% in that time.

V will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $1.47, up 13.08% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $6.07 billion, up 10.16% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $6.20 per share and revenue of $25.47 billion, which would represent changes of +13.97% and +10.83%, respectively, from the prior year.

Any recent changes to analyst estimates for V should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.07% lower. V currently has a Zacks Rank of #3 (Hold).

Investors should also note V's current valuation metrics, including its Forward P/E ratio of 30.57. This represents a premium compared to its industry's average Forward P/E of 21.49.

We can also see that V currently has a PEG ratio of 1.97. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Financial Transaction Services was holding an average PEG ratio of 1.7 at yesterday's closing price.

The Financial Transaction Services industry is part of the Business Services sector. This industry currently has a Zacks Industry Rank of 96, which puts it in the top 38% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow V in the coming trading sessions, be sure to utilize Zacks.com.

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